The Low Incomes Tax Reform Group (LITRG) is alerting taxpayers who missed the Self-Assessment deadline of January 31 that there could be circumstances where they may be able to avoid a penalty by claiming a ‘reasonable excuse’ for filing their tax return late.

Despite widespread publicity campaigns by HM Revenue and Customs to remind people to file on time, the tax advisory body believes there are certain situations where individuals, who could be unaware that they have the right to claim ‘reasonable excuse’, may be able to lodge their returns late, but not have to pay a penalty of at least £100.

They also say that more general exceptions could apply for the following:

Taxpayers who had registered for the online service between January 21, 2014 and January 31, 2014 but had not received their activation code by 31 January 2014; and

Those who had tried to access their online account between January 21, 2014 and January 31, 2014, but had forgotten their user ID or password and had requested replacements by January 31 2014.

HMRC had always advised tax payer to request their activation code - which arrives via post - several working days before the deadline.

However, LITRG says that in all cases full details must be sent to HMRC and it may be that a combination of reasons, rather than any one reason, together may constitute a reasonable excuse. In any case, any outstanding returns should be lodged and outstanding taxes paid without further delay.

Anthony Thomas, Chairman of LITRG, said: “A number of taxpayers may have a perfectly valid reason for not having filed a return on time. Latecomers now need clarity regarding what constitutes a reasonable excuse for HMRC. Even if granted an extension, it is essential that taxpayers inform the Department of the reason for filing late and that their returns are lodged as soon as possible. HMRC will now only accept late submissions digitally.

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“If your activation code arrived on February 3 2014, the tax return should be lodged within a few days of receipt or HMRC will not accept that awaiting the code was the sole reason the tax return was outstanding.

“It is also important to remember that penalty notices will normally be issued automatically, so individuals may have to appeal against a penalty if they qualify for a reasonable excuse. Concerned individuals should do this within 30 days of the penalty notice being issued, including full details of why the return was late. A copy of the appeal notice should be included with the penalty notice. It is crucial to appreciate that after a return is three months late, penalties will increase significantly.”

An online copy of the appeal form can be found on the HMRC website. If you have received a penalty notice but not an appeal notice, it can be downloaded here.

The following examples illustrate what HMRC could conside to be reasonable excuses:

the taxpayer had a life-threatening illness that prevented the tax return being lodged;

their partner died shortly before the deadline;

there were unexpected or unforeseen postal delays; or

their important documents were lost due to theft, fire or flood (victims of the recent Somerset floods have been granted an extension on these grounds) and could not be replaced in time.

HMRC’s list of accepted ‘reasonable excuses’ can be found here. Ths list is by no means exhaustive and there are other situations that can sometimes constitute reasonable excuse.